Ghana’s Finance Minister Declares Strong Economy Ahead of Power Handover

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KEY POINTS

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• Ghana’s GDP growth in 2024 averaged 6.3 percent, surpassing previous rates.
• Public debt decreased significantly, lowering the debt-to-GDP ratio to 74.6 percent.
• Inflation dropped from 54 percent in 2022 to 23 percent in November 2024.

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Ghana’s Finance Minister, Mohammed Amin Adam, has declared that the outgoing New Patriotic Party (NPP) administration is handing over a “strong economy” to the incoming government led by President-elect John Dramani Mahama.

Speaking at a press briefing in Accra on December 17, 2024, Dr. Amin Adam outlined significant economic progress made under the NPP government, asserting that the economy is on a path of stability and growth despite facing tough challenges in previous years.

“The economy has recovered strongly and faster than many anticipated,” Dr. Amin Adam announced. “We are handing over a strong economy.”

He highlighted Ghana’s robust Gross Domestic Product (GDP) growth as proof of the recovery, noting that growth rates in 2024 reached 4.8 percent in Q1, 7 percent in Q2, and 7.2 percent in Q3 — averaging 6.3 percent for the year. By comparison, the country recorded an average growth rate of 3.4 percent when the NPP took office in 2016.

Debt reduction and rising foreign reserves signal stability

Addressing the country’s debt position, the Finance Minister reported significant strides in reducing Ghana’s public debt. He revealed that the total public debt decreased from GHC807.79 billion in September 2024 to GHC761.01 billion in October 2024. This led to a reduction in the debt-to-GDP ratio from 79.2 percent to 74.6 percent.

“Our target is to reduce the debt-to-GDP ratio to 55 percent in net present value terms,” Dr. Amin Adam said, underscoring the government’s efforts to ensure Ghana’s debt sustainability.

He also spotlighted the growth of Ghana’s Gross International Reserves, which now stand at $8 billion, equivalent to 3.5 months of import cover. This is a notable rise from the $6.2 billion in reserves the NPP inherited in 2016.

According to Graphic Online, another key achievement cited was the improvement in Ghana’s trade balance. The minister noted a trade balance surplus of $3.85 billion and a current account surplus of 2.6 percent of GDP for the first nine months of 2024. These figures reflect a turnaround from the deficits recorded in 2016, which included a trade balance deficit of $1.8 billion and a current account deficit of 6.6 percent of GDP.

Economic growth driven by credit expansion and inflation control

Dr. Amin Adam also noted that inflationary pressures are easing. He said headline inflation had dropped to 23 percent in November 2024 from a peak of 54 percent in December 2022.

“We have seen significant progress in taming inflation, which stood at 54 percent in December 2022. By November 2024, it had reduced to 23 percent,” he stated.

Private sector credit growth was also identified as a major driver of economic progress. He revealed that nominal growth in private sector credit reached 28.7 percent in October 2024, reversing a contraction of 7.5 percent recorded in the same period in 2023.

“In real terms, private sector credit grew by 5.5 percent in October 2024, compared to a contraction of 31.6 percent last year,” the Finance Minister stated.

Dr. Amin Adam urged the incoming administration to maintain continuity in NPP’s key policies to sustain the progress made so far. He dismissed claims that the Ghanaian economy is in distress as “propaganda,” calling on President-elect John Mahama’s government to build on the gains made under the NPP.

“We hope the incoming government will continue with the policies we have implemented to sustain this recovery and ensure that Ghana’s debt sustainability targets are met,” he said.

As Ghana prepares for a political transition, debates on the true state of the economy are expected to intensify.